The good news is that all the banks are FDIC-insured, which means that up to the first $100,000 of your deposits are guaranteed by the federal government.
Who's Next? List of Troubled Banks Worries Wall Street, DC [ABC] (Photo: Getty)
]]>The good news is that all the banks are FDIC-insured, which means that up to the first $100,000 of your deposits are guaranteed by the federal government.
Who's Next? List of Troubled Banks Worries Wall Street, DC [ABC] (Photo: Getty)
]]>Total coverage: $2,900,000
Daaaamn.
]]>IIRC single-name accounts (e.g., just you) at a bank are covered for $100k (that is, the summation of accounts under a single name). Joint accounts (e.g., you and your spouse) are insured for the number of titles on the account ($100k per person), and under the FDIC rules the joint account is separately covered from whatever individual accounts you have. What this means is that if you play it smart, you can wriggle $400k of protection from FDIC insurance per bank by splitting your deposits as such (assuming you and your spouse's names are John and Jane):
John (Single) - $100,000
Jane (Single) - $100,000
John&Jane (Joint) - $200,000
Total Coverage: $400,000
If you're really lost, the FDIC has a great calculator here: [www.fdic.gov] You just punch in your deposits, who's on the title, and banks (each bank is considered individually) and it'll tell you how much you're covered for.
]]>Well see. The lists are nice for the people foolishly keeping in excess of $100,000 in the account. Learn your lessons and break it across banks. Break money across banks anyway so that you have enough emergency money in case one goes out and its 8 weeks before you get you money back.
As far as stock market beating inflation....not right now.
There are a couple of websites that people should be aware of
www.fdic.gov/edie
www.ncua.gov/ins
these are calculators that will tell you your coverage for banks and credit unions respectively.
FWIW, if you have $10.00 or $100k in a bank, if they are mismanaged, you should pull out as much as you can as quickly as you can. Some things that might indicate mismanagement:
1. Bad business practices (such as lending money to people who obviously can't afford to pay it back).
2. Offering services to people who wouldn't ordinarily qualify for them and looking the other way.
3. CEO has a smoking hot 29 year old secretary with huge hoots (the biological clock is ticking and he's not leaving his wife)
So for all your money they are paying you 1, 2, maybe 3% interest on, they are turning around and charging 5 to 20% interest ten times over. Pretty slick, till everybody gets greedy.
For a very good explanation of how our banking system works check out www.scamorbam/bankingscams.html
@savvy999: Why is it called the 'Texas Ratio'? Because it's god-awful hot?
Because "everything's bigger in Texas" - it's all about the exaggerations. The banks listed have overstated their loans/assets ratio and now they're being called on their lies.
]]>@Pro-Pain: what the hell are you talking about? Bush didn't have anything to do with this. The market is undergoing correction for poor credit practices and the fallout of the subprime bubble. the GSE's have been run by high-ranking dems for years, and in a free market, you have to look at them, not the president, who doesn't control the market. Nor do we want him to. Take your partisan vitriol somewhere else.
]]>The State Bank of Lebo? That sounds like the bank that holds my winnings from the Nigerian lottery.
]]>Bitch a little more about JP Morgan being mean to you on the phone or hitting you with a $1.29 charge or whatever, but they'll be there at the end of the day. Hell, I'll bet customer service is real personal and friendly at most of the banks on the above list...
Bottom line, if you have money you can't afford to lose put it in a bank too big to fail. Actually, make that "banks".
]]>A married couple can have several hundred thousand in deposits at one bank and still be insured by the FDIC through simple trusts for each other and other direct relatives. The FDIC website has its EDIE calculator to show how your accounts can be structured so as to maximize
FDIC insurance.
Folks who are managing large sums should investigate Promontory Interfinancial Network's Certificate of Deposit Account Registry Service (CDARS) program available at about 2,000 banks nationwide (including my bank, Decatur First Bank near Atlanta). CDARS can insure funds up to $50,000,000 by placing deposits in chunks under $100k to its member banks, all FDIC insured, and putting funds from depositors of other member banks back into your home bank. You receive one statement and one 1099, and funds equivalent to your deposit stay in your community for your bank to reinvest. Your CDs have the same interest rate and are available in terms from 4 weeks to 3 years.
One of the major reasons why IndyMac Bank went under is because some US Senator published a letter that he sent to a bunch of people that he believed IndyMac Bank was going to go under.
When you're in a competitive industry that requires you to have to loan out approximately 90% of your deposits, it will certainly hurt when suddenly you have a line of people who want to withdraw their money.
]]>WachoviaEmployee already touched on this, but the $100K insurance limit is per ownership category, NOT per account (and the limit is $250K for retirement accounts).
Credit unions are insured by the National Credit Union Administration (NCUA), which is essentially the same as FDIC.
Your bank or CU should (actually must, by law) have a brochure available titled something like "Your FDIC (or NCUA) Insured Deposit" which explains in agonizing detail how it all works. The best thing to do if you are concerned about insurance limits is to go and talk to a bank/CU representative. They can explain how the limits work and help you set up your accounts so that all your funds are insured.
This is COMPLETELY off the top of my head, but IIRC a married couple with 2 children can have funds of $1.4 million insured at a single institution as long as the accounts are set up properly.
And to the person who said taxpayers pay for the insurance payouts to customers of failed banks, this is not really true. Banks and CUs pay insurance premiums to FDIC or NCUA which cover the losses UNLESS things get really ugly like they did with savings and loans in the 80s. Then a government bailout is required. Older readers may remember the FSLIC which was like FDIC for S&Ls and died along with S&Ls in the 80s.
Will things get really ugly with banks now and require a government bailout? Probably.
]]>There is a lot more issues in play to cause a bank to fail than just a couple ratios and some witchcraft.
But media speculation sure doesn't help.
]]>@IphtashuFitz: It's public information retard.
]]>I don't need the media to tell me I need to make a bank run. I just do a little poking around on Bankrate.com. Fortunately, the only bank I have to worry about I have less than $30 in because I moved my money to a higher yield account a couple of years ago anyway.
Yeah, I want to know if my bank is acting financially irresponsible. I've dumped boyfriend's for this. I'll definitely start seeing a new bank if I find out they're buying dumb house loans.
]]>"The good news is that all the banks are FDIC-insured, which means that up to the first $100,000 of your deposits are guaranteed by the federal government."
Umm... the bad news is that all of us as taxpayers get to foot the bill to bail out the jackasses who loaned blockbuster video store managers $600,000 to buy a house.
I don't see how this is good news at all. If Freddie and Fannie go under, the entire US will be bankrupt. I mean all of it. We're done.
Scott Adams at MSN has already pointed out that the entire net worth of the United States is equivalent to 400 billion barrels of gasoline-- or put another way, the reserves of Saudi Arabia and Iran. Or put another way, Saudi Arabi and Iran have us pwn3d.
Here's the report on the retraction: [www.baltimoresun.com]
]]>@jswilson64: i don't think so. you gonna pay their employees living expenses, etc? credit is a tool. learn about it & use it wisely.
@HurtsSoGood: well said, thank
you.
@BabyGorilla: beautiful :)
]]>Wachovia has over $50 Billion in liquid capital per filing disclosed yesterday. Don't worry - your money isn't going anywhere.
FDIC insurance is not necessarily "per account", it is based on the titling of the account. Read the coverage rules before splitting your money into 5 personal accounts at the same bank and thinking you're covered - 'cause you're not. I believe it's $100K coverage for one single account, one joint account, one trust account, etc, but read the rules to be sure.
]]>@Derv:
ING doesn't charge overdraft fees? Is that true?
@MissTicklebritches:
Exactly. The only alternative is to hide this information from the public, which does nobody any good.
My heart skipped a beat until I realized---my fortune is in the State Banks of LESBOS! Whew!!!
/whoops, shitcan me if you must!
]]>@Derv:
I'm thinking of opening a savings account with ING. They seem to be doing all right.
Look them up on Bankrate.com. HSBC Direct is the one in worse shape.
[www.bankrate.com]
Could Fifth-Third bank be simplified to "First and Second/Third Bank"? That way we could avoid improper fractions.
]]>FDIC insures most Retirement Accounts (Roths, IRAs, Keoghs, etc...)up to $250,000.
So that IRA CD you got for $200,000 is ok.
]]>I think I recall you mentioning before you're from Indiana. I used to bank at a place back there called Fifth-Third Bank, which is far more rediculous than first-anything.
]]>"We are the United States Government. We don't do that sort of thing."
Cheers!
]]>Why would someone put the bank of Lebo on this list??? Lebo is a little town in southeast KS with a population of less than 1000.
]]>if you really want to be disappointed in the human race.
]]>@camman68: Its a forked stick which is used in "dowsing".
Basically, certain people (we'll call them "batshit insane") think that if you hold a y shaped stick and walk around and get really "in tune" with the earth, the stick will jump in your hands when it's over what you're looking for (water, gold, dead hookers buried in lye, etc).
Basically, it's nonsensical sorcery. Much like most of our financial reporting system.
]]>@jswilson64: Right on!!! Best post I've seen here today.
]]>Run on the banks? I wish we'd all make a run on credit cards. Max 'em out with cash advances, then call and cancel the card, then refuse to pay. Screw them!!!
]]>If you post: "Why are you posting it? Do you want to spark a bank run? Jerk!"
If you don't post: "Why didn't you post it? Did you have something to hide from us? Jerk!"
@Derv: Compared to some other depository institution, they pay a pittance interest (not as pittance as a basic Chase, Citibank savings account, etc. But you get the idea).
Don't quote me on this, but I think that the Netherlands based ING Group (parent company of ING Direct in the US) are in at least marginally better shape than some US financial companies.
]]>Bank failures FTW! I can't help but pay attention to what's happening around me and think how about all the idiots that voted for Bush in the last election. I hate to say I told you so, but I will anyway. You all deserve this.
]]>Yeah, I know I could do research, but it's hot.
]]>Saying that it is wrong to point out the obvious (banks are failing) is to blame the messenger rather than the bank. I would go on, but @HurtsSoGood: says it well.
]]>@Derv
Not a ton, try mega-ton. Consider the price for commercial lease/ownership, rising corp. tax rates, payroll/benefits, blah blah blah. ING and Emigrantdirect were where I held all of my "can safely tuck away but can still wire to my normal checking account within 2 bd" money. In early '07 I remember being paid out at nearly 5%, plus they showed you the daily interest calculations, neato for a guy like me (read name)
@EtoillePB
Don't take me for a snarky "tough-luck" character, I'm simply remarking on the economic lessons our great-grandfathers/mothers taught us. The positive-feedback loop of bank runs only worsens the market conditions.
Consumer confidence is one of those oft-irritating realities in economies. What Gramm said, while not altogether wrong, was a bit ham-handed. To your point, I agree our major lenders/creditors are not apt to issue extensions, for much the same reasons the banks are going under - liquidity issues.
]]>Consumerist, the "Texas ratio" is NOT calculated by comparing assets to non-performing loans. You are correct that it is a calculation to determine coverage of problem loans. However, to be scientific, the ratio is calculated by taking non-performing assets plus loans 90 days+ past due and dividing by tangible equity plus loan loss reserves.
For the record, IndyMac's Texas ratio was over 100% at March 31.
The Texas ratio can be very misleading because it does not account for any recoveries on problem loans and also treats all loans as if they were unsecuritized. Regulators require banks to maintain certain levels of capital adequacy, which should always be analyzed in conjunction with problem asset information. All of this data - on aggregate and by company - is publicly available through the FFIEC.
Also, you can go to the FDIC's website for information on how bank receivorships work and an explanation on what would happen to your loans, deposits, etc. if your banking institution failed.
]]>@InfiniTrent: It's a result of the merger between Fifth National Bank and Third National Bank. Ha! Truth is stranger than fiction.
@snazz: Wrong, some retirement accounts and POD accounts are insured for much more, so it's not "stupid" to have a $200,000 IRA in an account at one bank.
]]>I do believe that is at top-heavy fraction.
]]>What is the banking industries obssesion with putting the word "first" in their name. There's like 5 in my area alone claiming to be "first blah bank and blah".../end rant
When economists talk about a negative savings rate, they aren't referring just to your 0.75% savings account. Savings goes up when you deposit money or pay off debt (like credit cards), with the converse being true as well.
By increasing credit card debt faster than one's savings credit, one (in fact, many) people end up with a negative savings rate even though they have more cash in the bank than before.
]]>yeeeeaaaah...well, so much for that idea.
the truth is, most people are very uneducated when it comes to money. i know quite a few middle-aged folks that blew out their stock investments back in 2001 when the stock market took a serious dive. i kept trying to explain that it wasn't such a great idea back then, but most people explained "but my stocks lost 1/2 their value overnite!"
this is why people think banks are "safe". they deposit $10,000 & they have $10,000 (plus some nominal interest earned). much "safer" than buying $10,000 in stock & seeing that it's worth $7,000 in a week's time.
]]>Sorry... but did that say the "State Bank of Lebo"??? Unless this is a WoW in-game bank, the name alone is a good reason it should be taken out back and mercifully shot dead. Seriously: imagine the developers of Grand Theft Auto having a brain-storming session creating names of fictional business based on real-world counterparts. If someone had suggested "The State Bank of Lebo" they all would have had a good laugh and gotten on to developing names people would actually take seriously. "Lebo of the Lost"
]]>I like to hope that if my bank should go under, I'd (a) be able calmly and rationally to call people / agencies to whom I owe money and explain the situation and (b) be understood and accommodated in case my payments stopped flowing properly, but... well, you read Consumerist. What do you think the chances are of the individual not getting screwed?
@MissTicklebritches: Ha! So true.
]]>I overdraft occasionally, and they never charge a fee besides a few few cents for interest (never more than a dollar). They must save a ton of money by not having branches, but again, I wouldn't be surprised in the least, which is why I made sure it is FDIC insured like a regular bank.
]]>@Landru: Yes, people lost money at Indybank because they are complete morons and decided to put more than $100,000 in any one account. You can have multiple deposit accounts that are each insured up to $100,000. Personally, I hope the FDIC doesn't decide to bail out anyone over the $100,000 - people knew the risk but decided to bet against it and now they'll pay the price. Don't be retarded.
]]>A run on a bank is a "tragedy of the commons" scenario. Great idea for the individual. Bad idea on the whole.
]]>Sadly, I think we'll never learn the lessons of '29. I just read that IndyMac's ex-customers withdrew in excess of $1.3 BILLION(!). What bank can survive if knuckleheads don't understand the FDIC insures all deposits up to $100,00?
]]>Inflation is an invisible tax that reduces your purchasing power. Seriously, when did our money become worth less than Canada's? (No offense to Canada)
]]>The Texas Ratio is named when comparing the bad loan ratio of texas banks in the early 80's recession, although similar results were found when they (RBC) studied New England area banks as well.
In general I'm all for consumer awareness, but then again, most consumers have not learned the lessons of '29. Run on banks baaad.
/owned
]]>@backbroken: wrong site.
]]>To everyone who thinks it is a bad idea to publish the list: Are you farking kidding me?
]]>@EtoilePB: if Consumerist really could start a run on a bank, BofA would have been gone a while ago.
]]>You gots to diversifies with yo monies...
]]>Luckily, my bank is a larger operation and is not on this list.
]]>I'm a little confused. My local news said Wachovia was next on the list of potentially flopping. All of the invoices and payments to our vendors as well as paychecks from my company are cut through Wachovia (or direct-deposited) which means with over 500 employees and several million dollar paper checks going out the door, they have to be holding more than $100,000 in their account. (Big duh on that one) I'm completely ignorant about stuff like this so what, if anything, does that mean for me if Wachovia were to pull an IndyMac moment? Does it only apply to savings accounts? Would this affect our business? My paycheck? Again, I'm dumb about this, so please don't slaughter me in the comments.
]]>Apparently not.
That said, it is pretty horrifying when something you're connected with starts showing up in the news. In the last ten minutes articles have shown up about a raid on Wachovia Securities and although I know that's separate from the ordinary banking half of Wachovia where my boyfriend does all his banking, it's still pretty scary.
(Mine is Bank of America. They may be pure evil but at least they still seem solvent for the time being.)
]]>For anyone saying "Ohh, you'll cause a run on that bank", I bet you would have a very different reaction if the bank where you kept your money were on that list.
We would hear a swooshing sound, and then the wham of your screen door closing.
Seriously, folks should pay attention to these lists as well as the FDIC insurance rules. People really lost money in the Indybank closure.
]]>Unfortunately, this is only a ratio without a quantifier of just how much money was/is involved. Indymac had huge dollar signs involved even if their exposure was on a ratio of 50. 50% of $14 billion is STILL $7 billion...
]]>@Morac: actually FDIC insurance is more complicated than just "number of accounts." it probably has next to nothing to do with it actually. it's account holders, account TYPES, and beneficiaries that play a role in what determines coverage. FDIC.gov has a great tool to calculate your coverage.
and yeah. the FDIC doesn't publish lists like this to avoid runs on the bank. most people don't ever know they're bank is being sold or closed until the day of.
]]>CNN's breaking headline is Wachovia's headquarters being raided :/
]]>@Morac: Don't post that! The last thing we need is a run on the fed!
Seriously, these lists are about as financially useful as divinig rods. There are a lot of ways to move investments on and off of balance sheets to skew these ratios one way or another. It looks good under a "BRIAN HAMMONDS EXCLUSIVE" banner though.
]]>@snazz: It's funny didn't they just run a post about a bank run?
]]>Isn't there a way to play against the system when you know a bank is going under??
Perhaps... sell short and buy back when the bank is hosed?
]]>Of course the FDIC only works if the federal government doesn't go completely broke (collapses). With the amount of money the U.S. is spending on wars, financial bailouts, stimulus packages, etc, the U.S. is going to start need to borrow more and more money from other countries. So basically your bank account is insured by China.
]]>What is the banking industries obssesion with putting the word "first" in their name. There's like 5 in my area alone claiming to be "first blah bank and blah"...
/end rant
]]>Because it's god-awful hot?
]]>I'd want to know if my bank were that mismanaged. Seriously, these banks are going to go under because of their loan practices, not because of being "outed" online.
]]>Wow...even with the loss due to inflation, putting my money under the mattress seems better and better every day.
]]>IndyBank, the one in California that just failed, had a "Texas-ratio" of somewhere in the 50's, so that should just go to show that these sorts of lists aren't all they're cracked up to be.
]]>